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Agglomeration within and between regions: Two econometric based indicators

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Author Info

  • Valter Di Giacinto

    ()
    (Bank of Italy, LÂ’Aquila Branch, Economic Research Unit)

  • Marcello Pagnini

    ()
    (Bank of Italy, Bologna Branch, Economic Research Unit)

Abstract

We propose two indexes to measure the agglomeration forces acting within and between different regions. Unlike the existing measures of agglomeration, our model-based indexes allow for simultaneous treatment of both aspects. Local plant diffusion in a given industry is modelled as a spatial error components process (SEC). Maximum likelihood inference on model parameters is dealt with, including the problem of data censoring. The statistical properties of standard agglomeration indexes in the data environment provided by our SEC model are then treated. Finally, our methodology is applied to Italian census data for both manufacturing and service industries.

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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 674.

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Date of creation: Jun 2008
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Handle: RePEc:bdi:wptemi:td_674_08

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Keywords: agglomeration; spatial autocorrelation; spatial error components model;

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  1. Gilles Duranton & Henry G. Overman, 2002. "Testing for localisation using micro-geographic data," LSE Research Online Documents on Economics 20071, London School of Economics and Political Science, LSE Library.
  2. Michael P. Devereux & Rachel Griffith & Helen Simpson, 2000. "The Geographic Distribution of Production Activity in the UK," Econometric Society World Congress 2000 Contributed Papers 1397, Econometric Society.
  3. Thomas J. Holmes & John J. Stevens, 2002. "Geographic Concentration and Establishment Scale," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 682-690, November.
  4. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
  5. Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September.
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  7. Richard E. Baldwin & Toshihiro Okubo, 2006. "Heterogeneous firms, agglomeration and economic geography: spatial selection and sorting," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 323-346, June.
  8. Tomoya Mori & Koji Nishikimi & Tony E. Smith, 2004. "A Divergence Statistic for Industrial Localization," KIER Working Papers 587, Kyoto University, Institute of Economic Research.
  9. Maurel, Francoise & Sedillot, Beatrice, 1999. "A measure of the geographic concentration in french manufacturing industries," Regional Science and Urban Economics, Elsevier, vol. 29(5), pages 575-604, September.
  10. LAFOURCADE, Miren & MION, Giordano, . "Concentration, agglomeration and the size of plants," CORE Discussion Papers RP -1963, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. Marcello Pagnini, 2002. "Misura e determinanti dellÂ’agglomerazione spaziale nei comparti industriali in Italia," Temi di discussione (Economic working papers) 452, Bank of Italy, Economic Research and International Relations Area.
  12. Haaland, Jan I. & Kind, Hans Jarle & Ulltveit-Moe, Karen-Helene, 1999. "What Determines the Economic Geography of Europe?," CEPR Discussion Papers 2072, C.E.P.R. Discussion Papers.
  13. Belleflamme, Paul & Picard, Pierre & Thisse, Jacques-Francois, 2000. "An Economic Theory of Regional Clusters," Journal of Urban Economics, Elsevier, vol. 48(1), pages 158-184, July.
  14. Yunsoo Kim & David L. Barkley & Mark S. Henry, 2000. "Industry Characteristics Linked to Establishment Concentrations in Nonmetropolitan Areas," Journal of Regional Science, Wiley Blackwell, vol. 40(2), pages 234-259.
  15. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Investment in the European Union," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 959-972, November.
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Cited by:
  1. Di Giacinto, Valter & Pagnini, Marcello, 2011. "Local and global agglomeration patterns: Two econometrics-based indicators," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 266-280, May.

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